Since the beginning of the rise in late June, the average price of Titanium Dioxide in China has reached a high level of about 14500 yuan / ton. However, in contrast, raw material titanium concentrate price rise is more violent.
The price of titanium concentrate has broken through the high point in recent three years
At present, the ex factory price of titanium concentrate manufacturers near Panzhihua has reached 1850 yuan / ton, while the price at the beginning of the year is only 1200 yuan / ton. This year, Panzhihua Steel's sales strategy has been adjusted, the local mining volume has also decreased, and the overall supply has been reduced, resulting in the price rise. At present, under the situation of tight market supply, some manufacturers need to pay in advance to purchase titanium concentrate, which has obvious pressure on capital, and small factories will have great pressure.
At present, the price of domestic titanium concentrate has reached 1850 yuan / ton, and some manufacturers even quoted 1900 yuan / ton. In recent years, the domestic titanium concentrate supply is tight, and the price has continued to rise, which has reached the rare high price in recent years.
Prior to this, mining enterprises in Panzhihua, Yunnan and other major titanium concentrate production areas collectively raised the ex factory price by 50-100 yuan / ton, of which the price of 46 grade 10 ore rose to 1625 yuan / ton, up more than 30% compared with the same period last year, reaching a new high in nearly three years since early November 2017.
This week, the market price of titanium concentrate was basically stable, and the mainstream quotation of 46 grade 10 titanium ore from small and medium-sized manufacturers reached 1830-1850 yuan / ton. Titanium dioxide high price, operation cost is also cautious. At the same time, the prices of some enterprises in the imported titanium market also rose, among which Vietnam mine and Australia titanium ore all increased by 10-15 US dollars compared with last week. Vietnam's export quota has been liberalized. Recently, Vietnam's titanium ore has returned to China one after another. Due to the sharp rise of Panzhihua Iron ore, the domestic purchase of imported ore inquiry is also increasing. However, the spot market is tight and the price will continue to run at a high level due to the supply and demand problem.
93% of titanium resources in China are concentrated in Panzhihua and Xichuan. In recent years, there has been a shortage of titanium ore supply in Panxi area. At the same time, due to the impact of the epidemic, the output of overseas mainstream titanium manufacturers also declined. The high-grade sand dune deposits in the central part of Kenya's Kwale mine, which makes profits from base, have dried up, and the Brazilian mine at tronox has also announced that it is facing depletion in the first half of 2020, so the overall market supply will shrink. The main reason for the sharp rise of titanium ore price is the reduction of ore quantity at the supply end. In the current market environment, the ore price in Panzhihua area seems to have not reached the top.
However, under the background of domestic ore price rising, titanium dioxide manufacturers will turn to import ore procurement more. At present, the price of overseas ores ranges from US $250 / T to US $280 / T, which is still higher than that of domestic ores. Panzhihua titanium ore is transported by ship along Jinshajiang River, and the freight is relatively low. If the later ore price and freight cost is close to the overseas mine, there will be pressure on the price upward.
The above-mentioned people also believe that although the price of domestic titanium ore is rising, but the supply of foreign ore is also pouring in, and there is little room for the price to go up in the later stage.
Leading enterprises with limited profits accelerate upstream layout
The price of titanium ore soared, and the production cost pressure of downstream products including titanium dioxide, titanium tetrachloride and titanium sponge increased sharply.
On Thursday, the market price of titanium chloride went up again. LOMO BILLIONS and Jinzhou Titanium Co., Ltd. sent another letter to increase the price of titanium tetrachloride by 200-500 yuan / ton. This price rise is the third price increase in this month. At present, the market ex factory price is 6200 yuan / ton, the price of liquid chlorine continues to rise, and the supply of goods is tight, and the enterprise has great cost pressure.
At the same time, the titanium dioxide market runs smoothly this week, and the new unit price gradually goes up. At present, the ex factory price of rutile titanium dioxide in China is 13800-14500 yuan / ton, and that of anatase titanium dioxide is 11000-12500 yuan / ton. At present, the export market remains good, the export of enterprises maintains growth; the price of raw material titanium ore continues to rise, the cost of enterprises is higher, and the manufacturers' inventory is tight.
At present, some titanium dioxide small factories even have a loss situation. According to monitoring, the current cost line of rutile titanium dioxide is 12983.6 yuan / ton, which does not include freight and other cost factors. Although the price of titanium dioxide is rising, the actual profit margin of enterprises is very small. Due to the shortage of supply, the current titanium dioxide market transactions are very small list. In the past, a single purchase of 200-500 tons of orders, but now the majority of 30-60 tons, and even 10 tons, 8 tons of purchase orders. If the single purchase volume is small, the price is certainly high. However, if the single purchase is 200-500 tons, the quotation is still above 14000 yuan / ton, and the downstream will not accept it. So in fact, for small factories, it is difficult to make profits under current costs.
In the case of titanium dioxide price rising all the way, the process of enterprises receiving orders from low price to high price. According to the previous low-cost orders of titanium dioxide, if calculated according to the current ore price, it is actually the situation of cost inversion.
Tight supply of titanium dioxide is expected to continue strong
After the market downturn caused by the epidemic in the first half of this year, since the end of June, the domestic titanium dioxide price has risen for four rounds as a whole. However, in the current situation of high cost and tight market supply, the market still holds good expectations for the follow-up price trend of titanium dioxide.
This year, the operating rate of titanium dioxide enterprises is very high, at the same time, the downstream demand is also very strong, especially the export growth is obvious. Although the overseas epidemic situation continues, but in fact, overseas downstream or traders have a demand for stock. Under the hidden worries of the epidemic situation, overseas markets are worried that there will be a local import blockade. Therefore, some of the export volume from August to October was transferred to overseas downstream warehouses. From January to August, the export of titanium dioxide has increased by 20% year on year. So on the whole, this year's export volume is high, and the probability will increase year on year.
At present, both upstream and downstream of titanium dioxide industry chain are bullish. On the one hand, the supply of the factory is tight, there are large factory sealed orders to stop selling. On the other hand, the downstream also hopes to stock up at a low price. At present, they are purchasing production materials for the fourth quarter. And among them, traders also have the willingness to hoard goods, bullish future market, hoping to earn the price difference. In the past years, although domestic demand will enter the off-season in December and downstream coating enterprises will start to reduce, overseas demand in December is still a growth trend. At present, the fourth round of price increase of titanium dioxide in October has been implemented, and the market expects another round of general price rise in November.
At present, there is a tight supply of titanium dioxide market.
Generally speaking, the factory will set the amount of purchasing tasks for traders, and stipulate the amount of purchasing within a certain period of time. But in the current market supply is tight, manufacturers have no longer put forward the requirements of task quantity, and even can only supply products about 70% of the previous task quantity. In recent years, overseas demand is strong, foreign traders and end customers have a stock demand. At present, as long as manufacturers can ship goods, overseas people will take over orders. Many factories also give priority to supply overseas orders. Domestic supply is only about one-third of the output, which can not meet the current market demand for spot goods.
At present, the orders received by traders have already arrived in December. It is estimated that the situation of tight supply in the market will continue until December. Therefore, the market price will continue to rise until December.
LOMO BILLIONS related person in charge said that the recent titanium dioxide market demand started, the market supply is tight obviously. In addition, the price of upstream titanium concentrate is higher, which also has cost support for downstream. It is expected that the price of titanium dioxide will remain high in the short term.
The person in charge of CNNC HUA YUAN Titanium Dioxide also said that due to the rising price of raw materials, the market still has strong expectations for the price rise of titanium dioxide. However, the operating rate of titanium dioxide enterprises is generally high this year. In the short term, although the price still has an upward trend, with the shutdown of downstream coating enterprises in winter in December, the market may enter the off-season market, and the price may fall slightly.
